[quote=SD Realtor] . . . No that is incorrect. First position has nothing to do with that and the holder of the first mortgage is not in first position.
The taxman is. Why do you think the you get a nod from your lender if you do not pay taxes? Because they don’t want to lose the home to the taxman. . . [/quote]
Agree with your post, SDR, and also understand why a junior lienholder would want to see a preliminary and final HUD-1 before signing off their position in a short-sale transaction.
If a “tax-lien” on a short-sale property is actually for the deadbeat sellers’ personal income or payroll taxes owed (i.e. FTB or IRS lien) and a buyer already in escrow is required at the 11th hour to pay this lien in order to make the deal fly, isn’t this (indirectly) enriching the deadbeat sellers beyond just “saving their credit score” from foreclosure . . . “bribe” or no?
These government liens, whether or not they will appear in a “property profile,” need to be disclosed as “material facts as to the marketability of title” PRIOR to the taking of offers from prospective buyers.
I’m sure the typical “deadbeat seller” tells their agent/broker that they were “unaware” of these liens when they appear in a preliminary title report (after a good offer has already been accepted and the buyers may have paid for an appraisal and/or inspection). But you and I both know this is hogwash, as that seller was likely notified in writing by the agency MANY times of the tax owing.
What’s stopping listing agents/brokers from having that “Come to J@sus” conversation with potential “short-sale” listings prior to taking a listing??
That’s what a lawyer does before taking a case, (esp. a criminal case). Even though they charge by the hour, they STILL want to know what they’re getting into first (or if they even WANT to get into it):=!
This convo/meeting should include examination of the potential sellers’ mortgage payment records/coupons/stmts all the way back to the month in which they fell behind, candid discussions about any potential liens, and point-blank questions about any back personal or business taxes owing. The agent/broker should also obtain personal info of the sellers (first, last, middle and names of former spouses that would later be furnished to a title co), etc, at this time. Then the LA/LB could do a REALIST and/or ARCC (and court records, if need be) search of their own and find out their potential “short” sellers’ REAL story . . . up front.
IMHO, I think in many cases listing agents just want to be “popular” and “liked” to “obtain the listing” at whatever cost and then later throw a deal together and let the “chips fall where they may.” Not saying this is how agents on this board operate. IMO, taking a listing from a “short sale” seller is not about “like.” It’s 3-4x the work for the same (or less) commission than a “traditional sale” and they need you FAR more than you need them.
Holmes v Summer is what CA Agency/Disclosure procedures on your street are coming to. It’s about time.
